Santos (STO) Investor Day 2024 summary

Strategic direction and capital allocation

• New capital allocation framework from 2026 prioritizes sustainable shareholder returns, disciplined capital spending, and all-in free cash flow, with a capital ceiling to avoid boom-bust cycles and maintain 15–25% target gearing.

• At least 60% of all-in free cash flow will be returned to shareholders annually, potentially up to 100% if gearing falls below the target range.

• Sustainable annual production target set at 100–120 million barrels per annum for 2026–2030, supported by Barossa and Pikka projects.

• All projects must compete for capital within the new framework, emphasizing shareholder return growth over production growth, and phasing project development to avoid simultaneous mega-projects.

• Company-wide cost-out and efficiency reset planned for 2025 to sustain low-cost operations post-growth phase.

Major project execution and operational performance

• Barossa project is 83.5–84% complete, targeting first gas in Q3 2025, and will fully utilize Darwin LNG Train 1 until 2040.

• Pikka Phase 1 is nearly 69–70% complete, with first oil expected mid-2026 and plateau production of 80,000 bopd for 5–6 years.

• Angore project in PNG is online, producing 350 million scf/day, with new wells and backfill strategies to ensure LNG plant utilization; PNG LNG reliability at record levels.

• GLNG has increased equity gas supply, is on track to deliver 230–330 wells in 2024, and continues to improve cost and efficiency.

• Cooper Basin modernization and Beetaloo Basin appraisal are unlocking new resources and supply potential for GLNG and Darwin LNG.

Decarbonization and carbon management

• Moomba CCS Phase I is online, storing up to 1.7 Mtpa CO2e at a break-even cost of $28/ton, with Phase 2 in development to scale up to 20 Mtpa.

• New target to build a commercial carbon storage business capable of storing ~14 Mtpa by 2040, equivalent to 50% of 2023 Scope 3 emissions.

• 30% reduction in Scope 1 & 2 emissions and 40% reduction in emissions intensity targeted by 2030 from a 2019–20 baseline.

• CCS business model focuses on CPI-linked tolls and carbon price upside, with expansion at Moomba, Bayu-Undan, and Reindeer hubs and multiple MOUs signed for CO2 storage.

• Synthetic gas (e-methane) and low-carbon fuels are being pursued, leveraging existing infrastructure and partnerships, especially with Japanese utilities.